With coffee giant Starbucks (SBUX) poised to release its earnings report, one point slipped out just a little early: a new plan to improve the Starbucks experience by improving its customer service. This is a move that is likely to make the baristas—especially the unionized ones—sit up and take notice. They call it “Green Apron Service,” but investors call it a reason to head for the exits. Starbucks shares are down fractionally in Tuesday afternoon’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Some elements of Green Apron Service will sound familiar, including the “friendlier” part and the part where Starbucks employees go back to writing on cups with Sharpies. Starbucks started up the training on Green Apron Service last week, encouraging staff to bring in “…warm and engaging interactions with customers in the hopes of making Starbucks visits a habit.”
Naturally, this is going to put a lot of strain on the baristas, but Starbucks is backing the play with improvements in staffing as well as better technology to speed up service to the point that baristas can afford to be warmer. Further, Starbucks wants to ensure that the experience stays warm and friendly no matter where it starts. Whether it is a “digital host” that helps with online orders or an “extra person at the drive through…,” Starbucks wants to make human contact a much bigger part of the experience.
The Scent of Starbucks
While for some customers, the scent of Starbucks might best be described as burnt coffee and regret at paying that kind of money for a cup of coffee, others have a different idea. The Japanese, for example, have actually put together a Starbucks fragrance to tie in with three new drinks with peach flavor. Not unreasonable, especially given the fact that it is summer and is also peach season. But Japanese Starbucks is also offering Heavenly Peach Frappuccino Fragrance. And no shopper will be able to buy it.
Instead, Starbucks is running an X—formerly Twitter—campaign where 30 people will be selected at random to get a 0.07-ounce bottle of Heavenly Peach Frappuccino Fragrance. Those interest need only tweet with the hashtag “Heavenly Peach Frappuccino” in Japanese, along with “…your expectations for the product…” for a chance to win. The contest is limited to Japan customers, reports note.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 23.35% rally in its share price over the past year, the average SBUX price target of $96.24 per share implies 3.8% upside potential.
